A simple model of price dispersion

C-Tier
Journal: Economics Letters
Year: 2012
Volume: 117
Issue: 1
Pages: 344-347

Score contribution per author:

1.009 = (α=2.02 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This article considers a simple stock-flow matching model with fully informed market participants. Unlike the standard matching literature, prices are assumed to be set ex-ante. When sellers pre-commit themselves to sell their products at an advertised price, the unique equilibrium is characterized by price dispersion due to the idiosyncratic match payoffs (in a marketplace with full information). This provides new insights into the price dispersion literature, which instead commonly assumes that buyers are not perfectly informed and engage in a costly search.

Technical Details

RePEc Handle
repec:eee:ecolet:v:117:y:2012:i:1:p:344-347
Journal Field
General
Author Count
1
Added to Database
2026-01-25